2 Billion Liters of Australian Wine: An Opportunity to Escape the Drought?

The Chinese Ministry of Commerce has announced the removal of anti-dumping and anti-subsidy tariffs on imported wine from Australia. This move comes as trade relations between China and Australia have thawed in recent times.

This official announcement, made on March 28th, will take effect immediately on March 29th. It brings good news for Australia’s leading wine industry, which has suffered significant losses due to China, the world’s second-largest economy with a population of 1.4 billion, turning its back on Australian wine. In 2023, Australia had over 2 billion liters of wine inventory, equivalent to two years of production.

With China reopening its doors to Australian wine, there is now an opportunity for the 2 billion liters to reach Chinese consumers. However, the situation may not be as favorable as it was a few years ago, especially with real estate crises affecting the middle class in the world’s second-largest economy.

Meanwhile, millions of grapevines have been destroyed in Australia as prolonged price declines threaten the livelihoods of grape growers and wine producers. In fact, global wine consumption is also sharply declining. Nevertheless, the removal of tariffs by China is seen as a cause for celebration because it is an important market for Australian wine and has been a significant driver of growth in the industry in the past.

Reference: WSJ